Thursday, May 18, 2017

The behaviors and expectations of today’s consumers are rapidly evolving under the influence of digital and mobile technologies; as a result, retail growth and profits are quickly shifting to digital commerce. These changes require retail industry decision makers to acquire real-time situational awareness, new digital strategies and a digital mindset around business transformation. Retailers must recognize and act proactively when customers, competitors and markets change by deploying the appropriate digital strategies and technologies in the right sequence to maximize returns and competitive advantage.

We encourage retail executives to understand and follow these 13 actions:

Recognize the need for digital transformation extends beyond websites and mobile apps to the entire organization and across all business processes.

Understand the degree of change occurring in retail as a result of customers’ fast-changing behaviors.

Show the necessary leadership to change strategies, budget priorities and plans based on new data, trends and insights, and then make the required investments in digital technologies, people and skills to compete successfully.

See that traditional channel-centric strategies are no longer viable; rather, retailers must adopt precise, customer-centric strategies, enabled by digital technologies.

Don’t excuse slow adoption of digital technologies, as the data is clear and compelling and demands immediate action.

Think with a digital mindset, intimately understand the capabilities of digital technologies, understand digital’s role and importance in customer interactions, and develop new digital business models, processes and strategies for supporting today’s and tomorrow’s digital markets and consumers.

Realize that digital transformation and the industry’s adoption of digital technologies are occurring on an accelerated schedule that peaks around 2020. It waits for no retailer’s budget cycles, three-year master plan, leadership change or strategy.

Align the pace of digital transformation initiatives with the speed at which consumers are adopting digital technologies, behaviors, markets and thinking. This might mean over-investment in the near term to catch up or stay ahead of the competition.

Unify disparate digital transformation initiatives behind a single company-wide digital transformation doctrine – a guiding statement that effectively describes the reason for digital transformation, what needs to happen and what winning looks like. This doctrine must be used to direct and shape the entire company’s efforts.

Closely monitor the business impact of rapidly emerging digital technologies to ensure investments are prioritized and acted upon in the right time and place to maximize ROI and competitive advantage, while also balancing the need to innovate and embrace a fail-fast, test and learn mentality.

Understand how digital transformation will alter traditional retail roles, responsibilities and skills for all associates.

Pay close attention to how digital transformation shapes and changes consumers’ interactions and experiences, and train associates to best serve digitally enabled consumers.

The Greek philosopher Heraclitus wrote, “Change is the only constant in life.” In business, another constant exists: While some companies will adapt to market changes, others won’t. The pace of change across the industry landscape is accelerating like never before. Some retailers will choose to deny, ignore and retrench, while others will embrace, adopt and lead. The race to digital transformation is on, and there is no time for delay.

***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.

Wednesday, May 03, 2017

A key challenge that retailers face today is the difficulty of accurately judging where they are on the digital maturity curve relative to their competitors. There appears to be little expertise in making this assessment; for example, 79% of digital leaders don’t know they are ranked as leaders, and only 56% of retailers ranked as average in our study believe they are at this level. The other 44% in the average category mistakenly believe they are either leaders or laggards. The lack of competitive clarity makes it even more difficult to develop an effective competitive strategy.

Our research suggests that retailers’ plans reflect neither self-awareness nor a realistic idea of what it will take to catch up or leapfrog their competitors in this highly competitive space. Namely, factors such as online sales penetration, business performance, attitudes about digital, planned technology investments and efforts to close skill gaps do not align with the progress retailers expect they’ll make vs. their competitors over the next three years.

As part of this research exercise, we also asked 125 retail managers about the biggest mistakes they saw related to the digital transformation. Their top five answers were as follows:

Failing to stay fully on top of changing customers’ needs and behaviors.

Focusing insufficiently on cybersecurity.

Ignoring fresh thinking from outside the company.

Lacking a clear digital strategy.

Moving too slowly.

All five of these top answers are indeed critical to success. Retail executives would be well served to take these opinions from retail managers to heart.

Successful digital transformation initiatives require executives to have a vision for and understanding of what they are trying to achieve. As number 4 above identifies - retail managers believe an unclear digital strategy is among the biggest mistakes companies make when embarking on a digital transformation strategy. Digital strategies flow from and are the result of an effective digital transformation master “doctrine.” The purpose of a digital transformation doctrine is first to create a unified understanding of why digital transformation is needed and, second, to guide all tactical digital strategies that evolve from it. An organization’s digital doctrine should influence its strategy, its operating model and the tactics it employs to compete.

***Full Disclosure: These are my personal opinions. No company is silly enough to claim them. I am a mobility and digital transformation analyst, consultant and writer. I work with and have worked with many of the companies mentioned in my articles.